welcome to "worldwide exchange." i'm julia chatney and these are your headlines from around the world. cutting the global forecast amid a fragile recovery. we hear a warning on the market levels. >> very strong market prices are a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy. france's finance minister

hits at the dollar. he says the current is too come innocent calling for a rebalancing of global payments. shares in postal deliveries soar after cost savings and domestic growth. and the u.s. steps up security on flights to the u.s. transport officials say the uncharged electronic devices will not be allowed on board. >> you're watching "worldwide exchange." bringing you business news from around the globe. welcome again to "worldwide exchange." a weaker start this morning as we are 7:3 to underperformers taking stocks down .30%. friday's volume on friday is one of the lowest sessions we have seen. we are still digesting the

numbers of the u.s. from thursday. it will be interesting to see what we get as u.s. investors get back in motion as we head to earnings season this morning. we are seeing the general market down .30% this morning. significantly weakened german output and the may numbers are strong in construction. this is something we are seeing feeding into the survey numbers with a few question marks being raised about what we get as far as growth in the second quarter for germany. but let's take a look at the individual top stocks to be watching and continuing to watch in this session in particular. one of them we are keeping an eye on, shares of postal up as they raised their forecast for 2014. strong business in the netherlands as well as cost savings have improved the

outlook. they have been restructuring the business by raising funds from the sale of express. so that stock is up just shy of 16%. a quick check in the foreign exchange markets, we did see one and a half week highs but you have to wonder if the momentum will continue. and we have to see euro/similar at 1.3588. you have to assume the momentum is there despite a possible 50% increase in the balance sheet over the next four years. and the market is ignoring that for now. we have more data coming out this week. the asian session is lacking momentum from u.s. on friday. sri has some european visits

over there this week. >> reporter: that's true. angela merkel is the most important one this week. there's nothing to overlay the regional markets with for the beginning of the week. i suspect it will be about the individual emerging markets because there are a number of risk events we need to talk about. we'll start with indonesia going to the polls on wednesday for southeast asia's largest economy. look at what it is doing right now up by more than 1.3%. four-week highs here f for the jci. the banks are among the big gapers today so the market seems to be favoring a victory by the reformist pro-business over the form

former. i suspect that the markets are priced for perfection here. there's room for disappointment in indonesia because if you look at the two presidential hopefuls and look at the opinion polls, they have been running neck and neck. yes, the opinion polls have been wrong before and they got it wrong in india when we were there covering the election not too long ago in may. so there's the chance of an upset and a chance for some fairly nasty uncertain outcome at the election later on this week. we're watching that one. we are also watching tindia. this will be a big test of the government. that happens on thursday. the market wants to see fiscal consolidation if we are going to see the modi way continue. this is where we stand for the ce nr cencex near 25,000.

we already hit the stride here in asia. tomorrow is important for the kospi with the electronics makers. the earnings are expected to be disappointing with these sets of numbers. the numbers are suggesting a decline off more than 12%. they have to contend with a stronger yuan. watch out for the kospi tomorrow. >> thank you, sri. let's bring you up to speed with what we are focusing on today. stormy weather ahead with a typhoon described as a once in a decade storm heading to japan. we'll bring you the latest on that. retail reality. america is in talks to pay off a $10 million e loan. we'll bring you up to speed on that story. plus, new security rules for plane passengers on u.s.-bound flights including charging electronic devices.

we'll have all the latest on that, too. and "transformers" smashes the u.s. box offices over the weekend raking in millions of dollars in ticket them hollywood. now the international monetary fund could trim its global growth forecasts. christine lagarde hinted at this in a speech in france saying the momentum could be less than expected. she blamed potential growth and subdued investment. lagarde was looking to boost this in education and health. and a warning about the record level is being posted about the u.s. stock markets. they did not believe the rally indicated a strong growth in the economic recovery. >> economic recovery is nothing to do with the high stock market. interest rates are low, wages are low and the emerging markets

are still growing much faster than u.s. economy let alone europe. so and many of the corporations that are a part of our stock market are big multinationals that are increasingly getting a large fraction of their profits from the emerging markets. so the very strong stock market prices are, in a sense, a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy. >> who cares about fundamentals with central banks to stop them. but with warnings of the imf ringing along bells, we are approaching the high water mark for risk assets. joining us is the head of the national australia bank, simon, good morning. we spent a lot of time talking about record highs or near record highs in a lot of the markets at various points around the globe. we are going to talk about the

same thing as far as corporate credit is concerned. if i look at the current investment indices right now, we have room for tight anything. are we missing something? >> every time you think you hit a high watermark then they come out to say something to suggest it a bit tighter. if you look at most people's barometer for risk trading near six-year and in the high 50s, which some suggest has potential versus 2007 when it traded near 20 basis points, but we are a different world now than we were back then. you have to allow deterioration and draw the product there supporting risk assets back then. so i suggest if you take away 15 basis points or notch it down a few points since 2007, you are going to take away 15 to 20 basis points for the structure bid. now you are looking at ten basis points for the likes of 2007

when we were at 20. we are at a new high watermark. >> we are in new unchartered water. >> we are. if you try to look at the light basis, we are at or flirting with the high watermark now. >> does it mean we are more likely to correct now? because if i were a trend follower, i would say times are great. >> well, absolutely. a couple interesting points, your earlier comments out of as asia, this is a stimulus-led recovery and trade rather than risk on trade. we have to increasingly focus on the underlying fundamentals. if we are in sort of a deteriorating growth outlook with austerity in growth here, that is not great, but the german numbers out this morning,

the eurozone recovery should be a warning flag for many people in terms of how far down the risks want to go at the moment. >> you have also highlighted to me as we have talked away from the show about the impact of regulation right now and a potential block in the system as far as liquidity is concerned. if it would shift out of the tradeses, the buyer won't be there. >> everyone is chasing the yield and moving down the spectrum over the years, which is great. you have hado outsized returns, which is great. if we get this for the time being, there's no single trigger we see as the imminent threat to that capitulation. but if we get that capitulation trade, who is going to take part in this through the investors. >> what leads, i'm talking across products right now, we have fx currencies approaching

current levels it seems. you were in unchartered waters here making u.s. highs if we look at the u.s. markets n particular, what leads any potential correction or asset class? >> i'm not sure asset class leads. i think it will be risk through definition the more liquid areas. fx tends to be in spot pricing as more liquid and easier to trade on an in/out basis throughout the day. equities seem to be more liquid than cash spreads. and within the corporate markets, you will be looking at more of a buy and hold asset. but i think they are going to work in unison as and when rather than if and when. then the sentiment will start to deteriorate. >> it is tough to find a capitalist right now. top picks? >> looking at the indices, they have widened out a small amount over the last week or so.

we've had the compression trade versus nonfinancials for a few months now. >> in anticipation of earnings? >> in anticipation of earnings and volatility within the eurozone. and fastballs trade through nonfinancials over the course of the second half of the year and early part of next year. so i still like the compression trade and the australian credit with the underlying silver and triple rating. rns people are looking furtherer in terms of the potential yield, but it is more about the approach rather than just assuming i'm looking at one sector versus the other because that does not work. >> simon ballard head of credit strategy at national australia bank. the french finance minister has called for a rebalancing of the current sips used for global payments after pnb paribas was fined for breaking sanctions violations. earlier the "squawk box" team

caught up to him to ask his view. >> the role of the dollar in the financial system more broadway is anachronism of the 21st century. i have argued for a long time we need a global reserve currency, that the dollar shouldn't play this critical role. the role with dollar in trade, i think, almost inevitably will diminish but still will be important. >> stephane is in paris, and there's a tendency to say sour grapes, but we need a different global currency, don't we? >> it is still a few days after the fine against pnb paribas. the government is looking for pnb paribas needs to use a

variety of currencies. speaking of this weekend with the conference in the south of france, the french finance minister claimed rebalancing was possib possibly unnecessary. she says she will raise the case to the european finance minister today in brussels although i did not explain how they could force the market to switch currencies if that was ever possible. the french government received support from several large ceos of several large companies. the oil maker is ready to sell in euros even if the benchmark price in dollars was likely to remain. michele said this will conclude in dollars even if they are signed between european countries behind the currencies of much of the regulation. the companies which sells a lot in dollars like oil producers do not always want to deal with the

u.s. regulation. that's exactly what happened to pnb paribas to plead guilty for not respecting the u.s. embargo in sudan, iraq and cuba, even if this transaction is not made from the united states but they were made using the u.s. dollar which gives american authorities the right to take action and to ask for significant sanctions. so it's not a retaliation but it sounds like it is. >> like a fly swatter. but anyway, he did it. stephane there i was trying not to french bash and there you did it for me. thank you. in corporate news, burberry upset in a shareholder over pay. they are outlining the reasons behind the new ceo christopher bailey's relatively large pay package. one investor group has issued an amber alert over the luxury

firm's compensation policy. bailey agreed to pay a package worth 20 million pounds receiving just over 1 million pounds annually plus the opportunity to make 200% of his salary in bonuses. now we can report that the u.s. giant could be rivaling shire after three failed attempts. our ceo rick gonzalez has been there trying to woo shareholders holding out for a 50 pound a share bid. and "transformers" takes in around $34 million over the july 4th holiday weekend. the action-packed movie has made nearly $600 million worldwide but not always well at the multiplex. they say summer ticket sales are down 20% on last year. no potential blockbuster opened this weekend and last year

"despicable me 2" debuted over july 4th. now we have to take a quick break, but still to come on the show, slovakia is the biggest producer of the capital over the world, but will they accelerate further this year? we'll go there to find out, stay with us. the cadillac summer collection is here. ♪ ♪ during the cadillac summer's best event, lease this 2014 ats for around $299 a month and make this the summer of style. ♪

welcome back to the show. angela merkel is in beijing on her seventh trip to china. trade is top of the agenda and appears to be working. volkswagon received approval to build two more plants in china and expand current production at their other location in qingdao. it will allow them to invest in china's security markets. british foreign secretary william hague and chancellor george osborne start a two-day trip to india, the first since may.

after leaving the soviet block in the 1990s, they shifted from their production of weapons to become the biggest automotive maker in the world. they see that trajectory continuing. >> this is one of the fastest growing countries in the eurozone and it was in the crazy era and now it is the biggest according to domestic and foreign cars. our economy will accelerate by 3% this year and next year it will also be better. >> i hate talking about poster boys as far as the eurozone is concerned, but they are resilient during the financial crisis. and i wonder how the situation in ukraine and russia is impacting confidence in the

business environment there. >> definitely. we need to separate the two, really. buzz what is the growth story that continuing quite substantially compared to elsewhere in europe through the financial crisis. and, in fact, last year it bottomed out with a growth gdp figure just under 1%. now, as you indicate also we are going to be seeing growth continuing toward 2018. the deputy prime minister talking about that earlier this morning. but what are some of the issues and the issue of ukraine being one that is definitely at the forefront of a bordering country to the east of slovakia. a lot of businesses say that's the main risk they are looking at. we should talk about this with robert simonchek. welcome, robert. we were just talking about the risks that exist because you have fantastic growth here and then at the same time you have an economy where people would argue, well, it maybe isn't

diversified enough because you are dependent on the auto sector for electricals and you have the risk of ukraine just to the east of you. >> well, i think we are strong in several areas. one is automotive and one is electronics but also information technology which is much higher than the component of the economy. so what we need to do is to build big brands and global companies and like slovak economies and suppliers into them, of course we are a small country very much dependent on ergs u and very much dependent on foreign investment. and crisis in ukraine is not helping. we have not seen any negative effects to that respect, but certainly that is a threat or a risk not only for slow vvakia b also for europe. >> do you think we would be

better off if we were not a member? >> no, it's a big difference. and the big hurdle was when we joined to europe because with that we have a stable currency, a lot of new investments came in, much lower risk for any investors. slovakia has a great positive value that we brought in. >> what happens if we see a global slowdown? what happens then if you are dependent on exporting all the cars and electrical goods? >> i think we are pretty much diversified in terms of exporting to the rest of the world, so it is not just one region. if you have a global economy slow down, then all the countries will suffer. but if it is only one part of the world, we can basically supplement that with some other area that is growing fast. we certainly need to focus on fast growing markets in our exports. and that's one of the tasks of our agency. >> one area where there's been some criticism is that you're

developed in, for example, the auto industry in electricals and technology, not so much when it comes to insuring a knowledge economy is there for a couple decades down the line. that rnd spend is significantly below average here. how can you change that? >> actually, we are in the process of changing that. the government is about to pass a new law where you can deduct from taxes an rnd investment. we are also trying to upgrade in investments here from global companies and they are slowly but surely bringing in some rnd components connecting them to the universities and the rnd institutions. yes, we are below average but we have a good plan to boost it up. >> okay. robert, lovely seeing you. it's very, very hot here. it is, what, 35 degrees it feels like? we are enjoying it, we are burning to a pulp here, robert. thank you very much, robert. the ceo of the slovak trade and

development agency. we'll see you more here in approximately an hour's time. >> we look forward to it, louisa. we'll catch up with you later in the show. now with the conflict in ukraine escalating, we'll see more in europe coverage. still to come on the show, we are shedding light on dark pools. what effect does this have on trading? we'll discuss that right after the break.

you're watching "worldwide exchange" bringing you business news from around the globe. welcome back to "worldwide exchange." warning signs the imf chief christine lagarde will cut the global forecast and make a fragile recovery. we hear that they are concerned about market levels. >> the very concerned stock market prices are in a sense a symptom of the weak economy. not a symptom that we are about to have a strong recovery through our real economy. france's finance minister hits at the dollar. he says the currency is too doll nant to be used for global

payments. shares in dutch mail service soar after delivering on cost savings and domestic growth. and the u.s. steps up security on flights to the states. transport officials say that uncharged electronic devices will not be allowed on board. european markets this morning under a little bit of pressure after we had one of the lowest volume days this year on the friday session an the u.s. markets were closed, too. very little data today following the payrolls on friday or thursday as it was last week, so winging around a little bit we did have industrial output data from germany this morning significantly weaker than expected. actually the biggest fall in two years down 1.8% right now. geopolitical concerns and construction weighing on the numbers n particular. so i think a few questions are being asked about the strength of growth in the german economy

right now weighing on the market slightly this morning. now the spotlight is back on dark pools and high frequency trading this week. the u.s. committee on banking and housing of urban affairs will examine the role of electronic trading at a hearing tomorrow. this is the number of barclays clients using dark pools declines on the back of a lawsuit filed by the new york attorney general's office. many other financial institutions will be keeping a close eye on the output of the case as dark pools account for an estimated 40% of total trading volume. now steven meyer, chairman of the european securities and market authority is joining us now from paris. steven, thank you so much for coming on. of all the discussion about this situation right now, i think it's quite conspicuous no high frequency trading firm has been accused of doing anything wrong and i wonder ultimately if it will turn out benefiting sophisticated technology right now to explode loopholes in the

regulatory framework. do you agree and how can that be addressed? >> good morning, julia. high frequency frayeding has been already for a long time on the agenda of the european securities market authority. we have issued guidelines on the high frequency trading in 2011 and what we are trying to do there is to insure it doesn't result in instability or harms the interest of the investors. >> but you could argue that the regulation that's already been put into place is actually helping the growth in high frequency trading and in dark pool activity because it meant that there was a stratification or trading was divided ahong a number of different venues right now. how can an update to the regulation because i know you are working on one right now actually resolve that? >> i think we need to separate out dark pool trading and high frequency trading. maybe first on high frequency trading.

we don't see it as a necessarily bad advancement in technology. we think that knowledge can improve the functioning of financial markets but we need to make sure that we have the right internal controls. we are looking at trade ratios that have been issued in guidelines in 2011 that will now get a more stronger legal backing in a recent european legislation. dark pool trading is about the amount of trading which is done in the dark side or not in the lit part of the market. and indeed we are concerned about the share of the market and there's been recent measures to insure more and more dark trading moves to the lit market. >> so if we look at some of the accusations that have been thrown towards the likes of barclays right now, how can regulation change and improve the situation right now without damaging liquidity? because that also has been something improved by the dark pool surely.

>> well, you know, i cannot comment on individual open forcement cases or speculate about future possible enforcement. our approach has been regarding high frequency trading is that we should ensure both trade and investment venues are strong in their investment systems and toward the regulator. under the new regulatory framework it will be the obligation for propriety trading with high frequency trading to report that to the regulators. on the side of the dark pool trading as i just said, there's going to be quite tough and hard limits on the amount of dark trading that can be conducted. >> but the fact that it's dark makes it complicated to regulate. the talk of caps on the amount of trading in a particular stock in a dark pool, how do you regulate that? by definition it's dark. >> well, dark, i think we need

to talk about two things here, first we want to limit the amount of dark trading because we think that the market and the lit market plays a very important role in terms of tries discovery and is important in terms of getting benefits to investors to understand how the pricing is going and what is available in the order book and also after the trade has been completed transparency on that trade. so i think that is for the investors. on the dark pool trading it doesn't necessarily mean that the regulators don't have insight to that. they can access, they will have access to the books of the traders and also what is conducted in the dark pool side. >> skeptics would argue that regulation is behind the speed of a financial markinnovation. who are you speaking to about these regulations? >> any regulation we do first is

with the national regulators. once we have assembled them on advice, we will substance keptly share with the stake holders really at the edge of technology and try to understand how the rules and regulations work and practice. so this is not only made by the national regulators but we consult with the relevant market participants and with the stake holders to make sure the rules we make really work in practice. >> very quickly, we have to concede compliance by 2017, is that right? >> sure. we issued guidelines in 2011 that many member states already complied with but it will now get a stronger legal backing and will indeed start in 2017. >> brilliant, steven. great to get your insight this morning. u.s. officials have asked overseas airports with direct flights to the u.s. to ramp up screening of electronic devices. passengers may now be asked to

switch on mobile phones, computer and tablets and the devices that do not power up won't be allowed on board coming after the u.s. announced new security measures last week in response to intelligence that militants in syria and yemen are developing bombs that could invade airport security. but could this hurt airports and airlines? do more stringent security measures put you at flight? i know it is for my own good, but i do get rage when waiting at the airports. big blowers helping china go green. ibm signed a deal with the city of beijing to help tackle its collecting emissions data in realtime. coupled with the tech giant's forecast expertise, they hope to

predict where smog builds up and it will look at what has an impact on the flight to clean up the air. and the central bank will continue its massive stimulus program and will do so for as long as it takes to achieve the 2% invasion target. the comments come from the quarterly meeting at the bank of japan's regional branch managers and also is the third largest economy that is set to continue recovering modestly despite the sales tax in april on household spending. sticking in the region, the large typhoon is approaching southern japan and the government could issue the highest level warning for the island of okinawa tonight. here's the story from tokyo, makiko? >> the typhoon is one of the strongest in decades to come near japan in july. wind speeds are estimated to reach a maximum of nearly 200

kilometers per hour accompanied by heavy rain, high waves, possible landslides and flooding. the typhoon is expected to come closest to southern okinawa region by tomorrow morning and then move eastward to southwestern japan. the government is considering issuing the highest level of warning for a typhoon for okinawa as early as tonight. and it would be the first time for such an alert to be issued since the current warning system was put in place last august. the government has set up a special liason office for the emergency management center and the finance minister has canceled his trip to the u.s. to deal with the situation and is calling on local governments to tell their residents to evacuate as an early stage. back to you. still to come on the show, adding a competitive edge to your bike as you go to work? stay with us, we are back in two. the cadillac summer collection is here.

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boeing is assessing the damage to several 747 few fusile

lodges. the shipment was on its way to washington state. workers recovered three fuselages that didn't tumble down the embankment in montana. the stocks are slightly underperforming the broader market. the delegation is meeting with a court-appointed mediator in new york today.

>> economic recovery is not the same as the high stock market. the reason the stock market is high is in part interest rates are low, wages are low, and the emerging markets are still growing much faster than the u.s. economy let alone europe. so in many of the corporations that are a part of our stock market are big multinationals increasingly getting a large fraction or profit from the emerging markets. so the very strong stock market prices are in a sense a symptom of the weak economy, not a symptom we are about to have a strong recovery to our real economy. >> michael is here to join me on the set now to talk about this. michael, good morning. let me bring up what joseph

stiglitz is saying there. what do you think he's saying there? >> he did share the nobel peace prize with young's husband, so he is kind of lively at the breakfast table. so i think we have seen a decisive uptick in the data in the last two months. we went over equities about seven weeks ago. and by so doing, we don't try to time the market to the day. although we manage to capture 80% to 90% of the rise in the equity market so far this year. so there has been a qualitative improvement in the data. call me old fashioned, but in previous business cycles if the unemployment rate was improving at this rate, we would be talking about a non-accelerating inflation rate of employment that could fall to create inflation. no sign that janet yellen is

worried about that. >> as we go back to payrolls, the earnings part of that was crucial, 2%, still looking pretty benign. so right now we are not concerned about the level or at least starting to see a more higher part of inflation many the u.s. right now. >> that's a fair point but liquid rate markets are positioned where people's psychology are positioned. and it is positioned for a continuation of the easing policy of the fed. and most of the fed people are also positioned that way around. i'm just saying look at the bank of england and look how quickly the data turned upon the bank of england and the bank of england had to turn itself. >> the market was questioning when rates hiked in the u.s. that was the fallout on thursday that we got as far as payrolls are concerned do. you see a pickup in rates perhaps being a catalyst for derailing the rally we are seeing now in equities even if it is a measured to increase this toward the end of the year? >> some people are questioning whether the fed is behind the

curve. some people questioning whether the curve is behind the curve if you want to put it that way. we didn't see much move at the long end as you mentioned but the two-year is now pushing up to the september 2013 highs near 53 basis points. so that's the thing to watch. i think that's where hedge funds want to play with the rising mac macrotrend. i don't think we'll have a big breakup this summer. >> i'm going to come back to that and how we trade a lack in the markets right now, but we also have a lot of fed speakers this week. so what is the risk leading to the dubbish side, but they are projecting more here in the coming weeks. >> this is where we have to be tight and disciplined. i think as people begin to react to the data we have seen, not just on thursday but the previous numbers were pretty good as well, then that may lead

to some repricing in the market. so for me that is actually crucial. i think the message janet yellen has been trying to portray and will continue to do so over the summer will be at the fed, it is just continuing to be easy and maybe allow inflation to pick up a little bit more than it should do in the cycle. >> and that is okay rather than disregard it completely right now because i do think investors are a bit cautious as janet yellen is looking at the underlying data and we started this by discussing the questions that need to be asked. >> i think the word is gospel to the extent that her senior colleagues seem to agree with this. st stanley fisher is more of a question mark but he is experienced. we have a different approach

gauge with long-term employment. so this is a fiscal approach that you don't have in the states. >> very quickly, you mentioned the fact that you expect the local environment to continue. how do you position yourself to play that or to benefit from that in the earning season? what sector could see surprises here? >> first we are probably taxing just a little bit low, but we are not going to have waves of volatility in the way that we seem to like the middle '90s and mid-2000s, so in general below. and the kind of sectors performing in that environment are tending to be tech, materials, et cetera. >> because it's the combination that investors have to worry about. so your pick for the next few weeks then?

>> tech. >> great. michael sullivan, great to have you on from the credit suisse bank. andreas treichl will be coming up at 5:20 cet, so don't miss that. and now we'll get a sports update. novak djokovik had a championship point in the last set only to fight back. a tense finale managed with djoskovic edging out the final set 6-4. and the british grand prix got off to a bad start yesterday with a high-speed crash on the first lap that led to a delay of almost an hour.

the lead er led to his first finish of the year and lewis hamilton went on to win. nico rosberg is now retiring after his gearbox failed. and the netherlands faces argentina on wednesday. that's in san palo. brazil versus germany is on tuesday. an estimated 2.5 million people lined the streets of yorkshire in london, england, to watch the opening stage of the tour de france.

the race will enter london today which will be in cambridge just after midday and finishing around 4:00 p.m. this will be beyond the ability of most of us, but a new software is encouraging you to get a new bike. the app will encourage those to compete with colleagues pedaling their way to work. i am joined now onset with ryan, good morning. can you tell us what this is and who you are targeting? >> this is an online platform app to allow you to log your bike journey to and from work. it will tell you how many calories you burned and how much money you saved instead of driving a car. and you can get points to get

discounts online, give to charities, et cetera. the core target at the moment is big blue chip organizations that are about health and well-being strategies. >> so it is not something me as an individual can just download the app and track my performance. >> as it stands the employer pays for it and it is completely free of charge to their staff. we are in discussions with a few u.k. retailers about white labeling the software and to launch for all cyclists in the u.k. at the moment, you do have to be an employee of one of our clients. >> the first thing that i thought when i read about this application, particularly the desktop that allows you to compete with your colleagues, is how do you stop someone from saying, i did a sok cycle and they just park the bike. >> it's a question we get all the time. and i guess the crux of the app

is it does take average speed. so if you are claiming to be on a bike and accelerate from 0 to 30 miles an hour in two seconds, we ping the message saying you are not cycling and eventually we give them red flags because there are people that might be tempted to do so, but the long and short of it is it is quite self policing so the users can see how much the colleagues are claiming to travel. and you don't want to be the one logging100 miles when you didn't go anywhere. we have conversations about the expensive hobby, but you can bicycle tax free to reduce the cost substantially for employees. >> i can see health and safety officers getting scared about the prospect of their employees racing each other to work. >> it is not as if it's a time

file, i guess you can say, so it's not a race. we bank it on journey and not miles, so it sort of makes it fair. to the individual, collectively we don't rank anyone in a public manner. >> no one will win points based on speed, it is distance. >> right. there are similar apps doing initiatives such as that, but that's not something we do. >> so i asked about individuals being able to use this app, do you think it would pay, have you looked into this and divided not to do it to compete with your friends to have an a, p pp to s to each other. >> any user can download this to compete against their peers, but this allows those in an office to gain perspective on who is cycling and are there people i have not spoken to so that i can join a cycling group.

suddenly you can get the u.s. versus germany and australia. >> very quickly, what is the cost or the cost per employee? >> the cost per employee is quite nominal. we charge based on the size of the employer. it ranges from as low as $5,000 to $25,000 to $30,000. >> okay. great to talk to you, co-founder of please cycle. loan talks could see the entire apparel board go. details coming up, stay with us.

welcome to "worldwide exchange." i'm julia chatney and these are your headlines from around the world. christine lagarde cuts the global forecast and makes a fragile recovery. and joseph stiglitz is very concerned about the market levels. >> the very strong market prices are, in a sense, a symptom of the weak economy, not a sense that we are about to have a strong recovery to our real

economy. >> france's finance minister hits at the dollar. they say the currency is too dominant calling for rebalancing on what to do to use for global payment. shares in dutch mail service soar after delivering on cost savings and domestic growth. and the u.s. steps up security to flights to the united states. electronic devices that do not turn on will not be allowed on board. >> you're watching "word worldwide exchange," bringing you business news from around the world. >> if you are just tuning in, thank you for joining us on "worldwide exchange." a little bit of slippage after stocks closed on friday. welcome back to the u.s. if you are just joining us today down 12 points. the s&p 500 is down right now.

the nasdaq is down five or so points lower. we did see gains near .5% or so on thursday. a lot to tune in to this week. we have a lot of fed things to watch out for, too. a quick check on the your meeur volume there is. we are just balances off lows right now down .10%. we had much weaker than expected german industrial output this morning. the biggest fall in two years falling on the back of retail sales and the eyebrows are being raised over the gdp q2 growth. we are keeping an eye on shares in the dutch mail company postnl

raising their forecast for 2014. they say cost savings has improved their outlook. postnl has been hit by falling mail volumes over the recent years but they have been focusing on restructuring their mail to express. and the momentum is at 1.35 for the euro/dollar. we are seeing a slight push concerning the yen. we'll look at asia and go to sri this morning in singapore. sri? >> hi, julia.

there aren't really many macro factors really informing the trading session today at the beginning of the week here in asia. it is really down for the individual risk event over the course of this week. and indonesia is one of them heading to the presidential polls on wednesday. just before that, the jakarta is knocking on the door of 5,000. we are looking at four-week highs here for the index and up by 1.7%. the banks are amongst the big gainers today. and the market favoring a victory by the reformist pro-business jakarta governor on wednesday over his main rival. and that was the form er rival. the markets are in danger of getting this wrong. if you look at the opinion polls, both of the candidates are running neck and neck, so there's the scope for the uncertain outcome come wednesday

if it is a close presidential race. if that does happen, the markets don't like the uncertainty and we could see the gains unravel. over the course of the week in jakarta, we'll be on the ground there to bring you live coverage. and elsewhere, the first real test for modi, the new prime minister of india, they got the budget on thursday. the market is banking on fiscal consolidation. if they get that, we could see further momentum for the sensex. we have trade data on thursday from china with inflation numbers on wednesday out of china. that's one of the reasons the great chinese market is in a holding pattern right now. so number a number of emerging market cues with trade conversations over the course of this week. back to you. let's give you a look now at what is on the agenda in the united states this week. the data is showing payrolls

with nothing major until wednesday when we get the minutes from the last fed meeting on wednesday. and wholesale trade numbers on friday also marking the kickoff of the earnings season before the opening bell. despite the kickoff of earnings season, the fed minutes will draw interest after the bond for payroll numbers pushed equities in u.s. to record highs. they hope to leave rates low until 2016 despite last week's warning from the international sentiment on the market. earlier the "squawk box" europe team asked if the fed was making a mistake by not raising rates to joseph stiglitz. >> my own estimate is that we, with the problems in europe, with the weaknesses in global aggragate demand, with the growing equality and the need for structural transformation and all the, both in north

america and europe, i think what i see is a continuation of what you might call the north atlantic malaise. and it is, i believe, clearly premature to raise interest rates. >> the greenhouse chief global strategist is joining us now from new york. dan, u.s. payrolls on thursday look at whether the fed could raise rates this year. >> yeah, i mean, listen, i think that's a stretch. i don't agree with everything joe just had to say. i don't see how income inequality factors into it, but policymakers here in the united states, at least the ones that matter, appear to be more interested in taking out so-called insurance policy. that is to say the bias is that the risks are too soon rather than too late. i don't think there's a chance of the raise this year but maybe to the middle of next year.

>> you are thinking the markets are bringing forth the rate hike. the two-year is the highest level it's been all year. >> i guess it depends on your starting point. btig is at 2015, so i see in a couple of my colleagues on the street bringing forward their rate hike forecast, but that is from 2016. so i'm not really -- it really depends on the starting point, but here's the important part for investors. where you start from really isn't that important. whether they hike in march, april, may, or august, september, the differences are relatively muted. what is ultimately going to matter is the path of policy in terms of the steepness of the tightening curve. and right now that remains investor friendly. >> i think if investors start to think the fed is going to raise rates, i agree about the end point of when they raise it or the speed at which they raise rates, but if we start about pulling rates forward into the first quarter of 2015, that's going to have an impact on

equity market sentiment surely. >> sure. when you look historically going back 30 to 50 years, shifts from this to a tight anything stance on the part of the central bank n this case the federal reserve, results in equity dislocation. it does not necessarily signal the end of a bull market rally. it does not necessarily signal a 15% correction in the price of equities, but what it often signals is an equity dislocation, a period of time when investors digest the new information. i don't doubt that's going to happen this time, but the fear monogoring of the feds shifting from buying the bonds every month to tight anything policy is somehow the end of the expansion, we'll go into a recession because we cannot handle modestly higher interest rates is an idea i completely disagree with. >> we have a lot of fed speak this week. the speaker tomorrow could have

an impact here and the risk is more hawkish than the conversation that yellin has made in recent weeks. what are you expecting here? >> well, everybody has their chances taken out, carved out. i think the important one is to see modi if he reflects a sentiment in the more hawkish direction, but the truth is here in the states we are about to enter earnings season. it is starting to accelerate beginning today, give or take. and alcoa reports today with others later this week. what ultimately depends for investors is earnings. it is not charlie evans or these fed presidents, it's earnings. and we are entering another earnings season and expect it to be pretty decent and ultimately for investor that is going to drive the stock prices higher. >> analysts are expecting to see double-digit growth in earnings in q3 and q4 of this year. does that actually make the outlook that these ceos talk

about in this earnings season perhaps more than important than the underlying data? >> well, yeah, the outlook is always important. and we say this every earnings season to some degree the report is back ward looking but what are ceos steaming going forward? that is relatively different. as for the earnings forecast, i don't know we'll get to double-digit earnings growth in the back half of the year. literally every single quarter for the last two or three years investors have baked in a level of optimism with respect to earnings that is almost never met. so i suspect the rates will come down, but ultimately we don't need 10% to 12% earnings growth to drive the stock market higher. we have seen over the last father to five years a much more muted pace of earnings growth that is more than sufficient. so we expect growth this quarter of 5%. if you get something similar, maybe a touch higher in the back half of the year, i don't understand, i can't make a closing case why unless evaluations contract and broad

stock prices shift higher. >> you make a great point as expectations always shift the closer we get to allow us to be more than we initially thought. dan, great to talk to you. thank you for that. now we'll look at today's other top stories. argentina's prime minister is leading a meeting in new york today to try to resolve the dispute over unpaid debt from the country's 2002 sovereign default. last month the judge blocked argentina from making payments on some of the bonds starting the clock to tick on a 30-day grace preeeriod. now american apparel is in talks with hedge fund standard general to secure funding to pay off a $10 million loan to creditor line capital. standard controls 43% of the retailer's stock.

they say american is looking to replace the entire board except for the co-chairman. the sale of the los angeles clippers could hang in the balance as the trial begins today in california. the trial will determine whether team owner donald sterling should be declared mentally unfit if his estranged wife shelley can sell the team to steve balmer for $2 billion. last week donaldi sterling's lawyer filed a lawsuit saying this is against privacy laws. is the biggest car producer in slovakia? we'll go there to find out right after the break.

welcome to "worldwide exchange." these are your headlines. imf sees global growth risks and it could be cut. and the rebalancing of the u.s. dollar dominance.

and make sure to have your tray in the upright position and your smartphone charged as new security measures come into effect for flights to the united states. this week we'll be focusing on emerging europe peeling back the layer option the most interesting economy looking for opportunities for investors, weighing the risks and finding out what the future has in store. we continue our coverage in slovakia with louisa to tell us more. >> hi. i was just saying hello to someone passing by the camera. there's a lot going on here in slovaki slovakia, a country of approximately 5.5 million people. you have ukraine right along the country here, and that is very worrying as they look at instability taking place there and whether or not you will feel

it to a deeper degree here to the economy. earlier i spoke to the deputy prime minister of slovakia and the finance minister and asked him how worried he was in regards to you cape. take a listen. >> this is the highest you can feel at this moment because of the geopolitical risk. some is happening behind the border, and for us as a country which is fully dependent on russia, i'm talking now about oil reserves and about gas, so this is very important for us. so we are the part of the yo eurozone looking into this. >> instead of the gas coming through ukraine, does that put you in a position where you are

kind of in between what is taking place between russia and ukraine? >> looking at our history we are always in between, so this is how that's spinning. last week we signed a men memorandum with ukraine because we used to get gas from russia and from western countries so the slovak republic was the transit country. now this is a result of the earnings and the profit because our gas company has the profit, which is coming from this flow of debt. so now in this moment we are somewhere in the middle, so we have to negotiate with gas prices and be cautious about the

needs of our economic which is important. it will be very interesting. >> and of course it is not just slovakia itself and other neighboring countries to the ukraine worried about what sharping in ukraine, but it is also companies like erste bank in austria with a big bank there with subsidiaries operating in the eastern european countries. on "closing bell" later this afternoon we'll speak live to the ceo of erste bank and the profit warning they posted that they expect to see in these particular areas. in germany and slovakia, it is a different story because they have seen substantial growth. we were looking at the gdp level of 10.3% and now are back somewhere in the region of closer to 3% heading towards 2018. they are very open with regards

to foreign investment. and did you realize, julia, they are very into nature as you can see behind me and more than 4,000 species of fungi exist in slovakia as well. so you learn something new when you are here. >> you do. good to know that. thank you so much. now in other news, boeing is inspecting damage to several 737 fuselages after the train carrying the parts derailed last week in montana. it was on its way from kansas to washington state. workers recovered three of them that didn't tumble down into the water. boeing won't be hurt financially but the losses will equal to three days' worth of production. a quick check on the share market performance, most of it is up changed in the german market today. the u.s. officials asked overseas airports with direct flights to the u.s. to ramp up screaming of electronic devices.

passengers may now be asked to switch on smartphones and tablets and devices that don't power off are not allowed on board. this comes after the u.s. announced new security measures last week that were apparently in response to intelligence of islamic militants. the bombs could have invaded airport security. the question is, could this hurt airports and the airlines? do you ever want extra security measures to put you offline or are you happy with the extra waiting time. if you want to join in the conversation, get in touch with us by e-mail or by twitter or directly by tweeting me. still to come on the show, movie goers can't get enough of the robots in disguise. "transformers" topped the u.s. box office for the second straight week. all the details, next.

"transformers" topped the u.s. box office for a second straight week taking in around $34 million over the july 4th holiday weekend. the action-packed movie made nearly $600 million worldwide. not all is well at the multiplex

as summer ticket sales are down nearly 20% on last year. no potential blockbuster opened this weekend either but last year "despicable me 2" debuted on july 4th. the box office receipts are down overall 4% this year. at columbia university, joseph stiglitz is warning fiscal stringency can threaten growth and create harsher legalities. earlier he was asked about the wrong formula. >> there's one critical difference between the 1997 crisis what we did then and the 2008 crisis. in 1997 the u.s. treasury demanded that we put all kinds of conditions on those that are getting assistance, but in 2008 the u.s. treasury shoveled

hundreds of billions of dollars to american banks. not a single condition was put on that money, so the banks could use that money to pay out mega bonuses, they didn't make sure that the bank stopped their abusive practices. they didn't use their power that they could have used to make sure that the banks didn't engage in market manipulation and predatory and discriminatory lending. so there's a fundamental difference and the difference goes back to what i was talking about earlier, the role of politics. in one case, it was american banks trying to get as much money for themselves and making sure that the countries were put at a disadvantage. and that's why they wanted to put conditions on the east asian countries than actually helping the american banks. in the 2008 crisis, they were just focusing on getting as much

money directly from the u.s. government as they could. >> joseph, we are going to come back to you after the break. we have 1:30 here, but i want to ask you very quickly, there's a lot of chest thumping going on in markets about the levels that we're at, and the market interpreting that as an indication that we are back to business in the united states. just very quickly here, how comfortable are you with where we are in terms of asset prices at the moment? >> i'm very uncomfortable, but let me make it clear that economic recovery is not the same as a high stock market. the reason the stock market is high in part is because interest rates are low, wages are low and the emerging markets are still growing much faster than u.s. company, well, let alone europe. and many of the corporations that are a part of our stock market are big multinationals

increasingly getting a large fraction of their profits from the emerging markets. so the very strong stock market price prices are even a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy. >> now speaking of markets, let's give you a look at the u.s. futures today with the markets closed on friday in the u.s. for the independence day holiday. the dow broke the 17k level of 17,068. we are also watching the 2011 level with the s&p 500 down seven points lower. the market opens to the equity trading session today. for now we'll bring you up to speed on the headlines from around the world. warning signs that the imf chief kris teen lagarde is going to cut the global forecast.

and joseph stiglitz is concerned about market prices. >> the very strong market prices are a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy. france's finance minister hits at the dollar. is it too dominant calling for a rebalancing on what to use for global payment. and shares in dutch mail service post after guidance for the year after delivering on cost savings and domestic growth. and the u.s. steps up security on flights to the states. the officials say the uncharged electronic devices will not be allowed on board.

welcome back to "worldwide exchange." a quick check on the u.s. market that was closed on friday. a lot of things for investors to focus on, but a slip 30 points lower for the dow, 12 points down for the xetra. here's what experts have been

telling us today. >> we are seeing an uptick in the data from the last two months. we don't try to time the market but we managed to capture 80% to 90% of the rise of the equity market so far this year. we have to see u.s. companies moving but the retail numbers could drive the evaluation. obviously, as i said, i do see -- financials over the course of the second half of this year, there's still a lot of australian credit with the

underlying aaa rating and high yiel yields, but we need to take an approa approach. israeli air strikes have killed seven men as the country retaliates against gaza. tensions between israelis and palestinians have risen since the killing of a palestinian teenager in jerusalem last week. apparently in revenge for the kidnapping and killing of three israeli teenagers. meanwhile in iraq, a shiite muslim cleric said prime minister anwar al maliki should be prevented from serving a third term and it would be a welcomed set. meanwhile, u.s. officials asked overseas airports to ramp

up screening of electronic devices. this apparently is in response to intelligence that militants in syria and yemen are developing bombs that could evade airport security. passengers may now be asked to switch on the smartphones, computers and tablets before boarding a flight to the u.s. and devices that do not power up will not be allowed on board. u.s. homeland security secretary jay johnson explained the importance of ramping up security at airports. >> we have taken the appropriate measures to deal with the existing situation and not unnecessarily burden the traveling public. >> chris yates is joining us right now on the phone. do we have to watch the security situation continuely step up or is this just a start of the measures? >> good morning to you. yeah, the probability is these

are measures that are going to be stepped up over a period of time. the current situation is that people who are traveling will be expected to turn on and power up any electronic devices they are carrying. and that instruction is likely to be devised as such that only a subset of all of the travelers who are actually boarding flights will actually be required to turn on those devices. so it is a random thing, if you will. but still, that in and of itself will certainly cool a certain element of delay because it certainly takes time to power up a electronic device. and prove that it actually works. >> the government has been very tight-lipped here in the u.k.

and the u.s. on what exactly is the reason they are doing this, but you have to believe particularly them getting so specific about what they are targeting for the initial security measures, they have some pretty credible evidence about what they are concerned about here. >> yeah, pretty credible evidence indeed. the issue is that two terrorist organizations have come together. one is kind of in the peninsula and the other is in syria. they are continuing to develop a device for the free deals. now any time al qaeda near the arabia peninsula is involve d i a process, so there is a heightened sense of alert.

and that's why we are seeing the regulations change right now. >> can you give us any compareson as we have prior experience here that we had in the months following september 11th. and we are coming up on the anniversary of the july 7th bombings, too. how different do you see the risks right now compared to what we saw after that? >> it's increasing. it has been increasing for some considerable number of moments now, but the british prime minister, the u.s. president and so on have occasionally warned in low-key fashion, i suppose, of an increased threat to sublati sublation, but that increases feelings further over the past few days. it is certainly a week and a bit ago that the authorities in the

states debate that the president and his team will debate this issue with the u.k. and other countries as well. and the results of that discussion is that -- i don't think there's a problem. >> chris, great to talk to you. chris yates at yates consulting. many of the rebels have reportedly escaped to the ream's main industrial hub. ukraine's president says he will continue to tighten the rings around the terrorists. joining me now is the senior at russian analyst at maycroft. good morning to you. do you see this as a pivotal

position or a shifting of the battlefield? >> no, i believe this is a pivot toll point. and also it's a major strategic setback for the separatists themselves. not only are they losing territory, but they are really having to face the fact that the russian cavalry isn't coming now. there has been this indication that russia may bring in peacekeepers to force a cease-fire. but it may not happen at this point. >> in conjunction of what you said, do you think this is credible in coming to the table talking? >> engaging in cease-fire talks, it is more likely a lot of the

fighters are going to lay down arms if they find their position hopeless. this is a move quite disunified with a large criminal evidence witness it. so we are seeing the military commander don boss who is up top of his title, the question is who is going to stand with him? >> no one. >> well, that remains to be seen. they also have uganda downstairs and it is how tight the heart and mind campaign is. the national guard is reporting the residents generally welcoming and i know there's been civil war talk.

>> i'm going to stick you back as we talk about the other top stories ahead of the justice department's criminal group v vowing that the agency is appropriately aggressive. after a decade of attending companies against criminal and civil charges. she says it is no surprise of facing wide-range popes. in the last two minutes she'll plead guilty to a felony. and meanwhile, michele is saying the hefty fine by maximum authorities by breaking violent accusations. the question is this will be

carried out -- >> the growth of the dollar or the financial system on broadway is an acronym. i have argued for a long time we need a global reserve currency. that the dollar should play this critical role the role of dollar inevitably will diminish but still be a balance. >> outside we are basing for a typhoon with winds estimated at 216 kilometers per hour. and they believe that the storm is moving to the okinawa region with heavy rains, landslides and floods there. and a new twist in the american saga apparel. we'll have signs of the

struggling retailer, next. jç)y

welcome back to "worldwide exchange." these are your headlines. christine lagarde says the global forecast could suffer a cut. and the french minister says

the dollar will see a hit. and make sure your tray is in the upright position as new security measures are coming for flights that are heading to the united states. it's been a few weeks since american apparel fired their ceo but the story continues to add new twists and turns just about every day. courtney reagan is at cnbc hq with more. welcome, courtney. good publicity, bad publicity. i bet that american apparel is waiting for the day when we don't talk about them. >> the soap opera continues to wage on with talks to raise financing to pay off a loan that came due after it ousted doug cherney. this is part of a deal with cherney under which he'll control the stake.

the funding of american apparel paying off the $10 million loan from lion capital has the right to call it in if cherney was removed. if the loan isn't repaid, the company could default on a $10 million line of credit. american apparel has agreed to replace the entire board except for its two co-chairmans who have more retail experience. now, still unclear what role cherney will play in the future if at all, but standard general is awaiting the results of an investigation into his behavior. cherney was fired over accusations of misusing company funds and his alleged role in distributing naked photos of a former employee suing him for sexual harassment. if he's cleared of wrongdoing, cherney could remain with the company but probably not the ceo. the american apparel stock is down 29% year to date and does have a very tiny market cap, we should note that for the viewers, but shifting gears

entirely, leaders today will join me on "closing bell" as i sit down with kim, khloe and kourtney kardashian. we'll talk about their brand, their endorsements and the world dominance of social media. it will be a good one. it's the highlight of my day, although "worldwide exchange" comes in a close second. >> of course it does. we'll be sure to check that out, courtney, thank you for that. no slam dunk for steve balmer with the l.a. clippers' future hanging in the balance today. all the details are coming up after the break.

the sale of the los angeles

clippers franchise could hang in the balance today after the trial begins today in california. they are looking into whether donald sterling should be declared financially unfit and if his estranged wife shelley can sell the clippers for $2 billion. "transformers" topped the u.s. box office taking in $34 million over the july 4th holiday weekend. the action-packed movie made $600 million worldwide but not all is well at the multiplex. they say summer ticket sales are down 20% on last year. no potential blockbuster opened this weekend as last year "despicable me 2" debuted over the july 4th weekend. and the u.s. box office tickets are down 4% this year. and for a look at what is on the agenda in the united states this week, nothing major until wednesday when we get the minutes from the last month's

fed meeting, thursday weekly jobs claims and wells fargo will report earnings before the opening bell on friday. don't miss it. a quick check on the futures right now, we lost ground in the last 30 minutes or so. the s&p up 3.5, the dow jones 34 points lower and the nasdaq is 6 points lower ending the session on thursday 17006 on the dow. and joining me is the founder and president of brewhill partners. michael, we are talking about fresh record highs as far as the market goes, but i think weaker data the week before last has retail names taking chips off the table here. do you think it is to be expected ahead of earnings season? >> well, in fact, in front of

the earnings season there's without question a lot of doubt in the market if the sustainability of the markets can continue, but that's the rhetoric for the last 16 months. that being said, i would not be surprised going into the fed minutes on wednesday, you start to see pull-back in the markets specifically. in the s&p, but i would not be surprised for the next ten days after that if it is full steam ahead as you start to see more surprises to the upside. and my key barometer in this case would be a 265 level in the ten-year yield where we have failed numerous times over the last six months. if we get through that, you are starting to see a little bit of a trade between bonds and stocks. >> you mention ed that it is no supposed to trade here --

>> normally the market has anticipated that and it's been discontinued because of one or two that have painted themselves into the corner here. and the banks will support the next third and fourth quarter of this mediocre rise. eventually we'll start to anticipate through euro dollars, fed fund futures or the two-year note showing this in the numbers. finally as a glowing perspective, but nothing right now is showing you that you get to gdp. it is not what people anticipated throughout the year. >> we'll see what happens on the back end. we'll continue to watch the

inflationary period. and that's it. thank you for watching "worldwide exchange" with "squawk box" coming right up.

good morning. welcome to "squawk box." after a three-day weekend, the dow finally getting over the 17,000 hump following the jobs report. but a nobel laureate is not comfortable with stocks at this level. and a train derailment could spell trouble for this monday, july 7, 2014. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on

cnbc. i'm becky quick along with joe kernan and andrew ross-sorkin. ready to make a run on more records, the close in on 17,000 for the first time ever. now there's no major economic data on the docket today, but among the highlights for today we have the minutes from the last fed meeting that will be released on wednesday afternoon. then there's the start of earnings season. the biggest names on the week's calendar include alcoa tomorrow, wells fargo on friday. the latest poll shows analysts are looking for second quarter earningings growth of 6.2% and the return to double-digit growth in the third and fourth quarters. we have not seen that since 2011 when the rate was 18%, but earnings season sounds like a good time for us to take vacation. >> i think vacation is in order for everybody. we have other corporate and economic news to bring you and maybe fun news. thrill seekers are gathering in the